Hello, Last year I purchased a car through the clunker program. Originally, my dealer taxed me on the $4500 but then I show him an article that I printed and they reversed the entry. Anyways, on the sales contract, the dealer still list the 4500 on F. Other. So in doing the Federal tax for 2009, I was asked what was my price before tax. I took the cash price from category 1 Total Cash price and subtracted the 4500. Does this sound right? For some reason, category F Sales Tax does seem to reflect the 4500 taken off. Thanks, Tony
On the C4C program there was an upper limit on the price of the purchased vehicle I believe. I think it was right around $40000 iirc. The reason for the question on that form ( I'm guessing here since I didn't buy a vehicle during the program ) is to make certain that the purchase price is not above this limt. The purchase price is the price of the vehicle that you negotiated with the dealer on the new vehicle alone, it's not the net price after rebates, or cash down payment or the $4500 trade allowance. Ig nore these last 3 items and look at the top line of your Buyer's Order. If it was a Prius then you have no problem. All Prius' were within the price limit.
I think you are trying to deduct the sales tax on your Federal return (as you should). The price I would put for my clients (I am a CPA and tax accountant) is the sales tax paid divided by the sales tax rate. In other words, yes, I would subtract the 4500 unless sales tax was paid on it. consult your tax advisor
I would assume whatever sales tax amount was charged on the invoice is the deduction. I could be wrong.
Up to the 49M or so limit, yes, Jim. But there is a disclosure in the return of the purchase price, so IRS can see that said limit was applied (they don't know the sales tax rate).
